What is a life estate?

A life estate is defined as a limited estate that is contingent upon the life of a specific individual, often referred to as the "measuring life." In essence, the rights to the property are granted for the duration of that person's life. Once the individual passes away, ownership of the property does not revert to the original owner but typically goes to another party, known as the remainderman. This structure allows for the use and enjoyment of the property during the lifetime of the individual, but it limits ownership duration to that lifetime.

This type of arrangement is crucial in estate planning, as it allows individuals to maintain control over their property while also designating future owners. A life estate can be impactful in determining how property is transferred or utilized after the life tenant's death, thus affecting inheritance and estate tax considerations. This clarity on ownership rights ensures that all parties involved understand their responsibilities and interests in the property.